Some good news on inflation!

Ian Kernohan

18 July 2017

In some good news on inflation, the Consumer Price Index (CPI) fell to 2.6% in June, still above the Bank of England’s (BoE) target but down from its recent peak, with the fall in fuel prices the major contributor to the decline. Although sterling is now close to its level of 12 months ago, some residual impact of devaluation is still feeding through.

However, with underlying inflationary pressures still low, we think that CPI is close to topping out, and the BoE will be happy to keep interest rates on hold.

In some good news on inflation, the Consumer Price Index (CPI) fell to 2.6% in June, still above the Bank of England’s (BoE's) target but down from its recent peak, with the fall in fuel prices the major contributor to the decline. Although sterling is now close to its level of 12 months ago, some residual impact of devaluation is still feeding through.

However, with underlying inflationary pressures still low, we think that CPI is close to topping out, and the BoE will be happy to keep interest rates on hold.

The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not get back the amount originally invested. The views expressed are the author’s own and do not constitute investment advice.